By Susan Alexander
So, what’s really in it for me if I transfer my gas dollars into electric dollars? Aside from the benefits to our air quality, the real reason is that as a member of a co-op, and helping to make that co-op financially strong, we can all benefit from an increase in the number of kWh sold. – Susan Alexander
Cooperatives exist in many forms: from food stores to credit unions to electric utilities— and my personal experience over the years as a member of multiple co-ops has been almost entirely positive. I attribute this to the general principles of a cooperative being hard to argue with: democracy, equity, mutual benefits, community.
And while there are many commonalities in cooperative structure, there are also unique circumstances that differentiate how they operate and how members can participate. For example, many cooperatives, in addition to having a minimal investment in the form of a membership fee, offer a reduction in cost of goods and services in exchange for an additional contribution in the form of time or effort. My local food co-op provides a discount on products sold in the store in exchange for some elbow grease cleaning the storeroom or stocking shelves. When we sent our toddlers to the Woodbury Playschool cooperative, we received credit towards their tuition in exchange for lighting the wood furnace on those nippy winter mornings.
That said, it is not always possible to receive discounted pricing or reduction in fees by contributing your time and energy. That is the case for WEC. Certain cooperatives, like credit unions and electric utilities, being highly specialized in their functions, do not present similar opportunities to reduce your bill by working off a few hours each month. While you are certainly welcome to volunteer your services for special events (e.g. the annual meeting dinner) this will not get you a reduction on your monthly bill…sorry! But you’ll get a mention and warm thanks from your fellow members.
So how can members of an electric co-op realize a reduction in cost of service or keep their utility bills as low as possible? Well, there are many ways to look at this question; some very obvious, and some less so.
First and most obvious is to reduce your use. We have been schooled on efficiency for decades, like choosing LED lights, weatherizing our homes, turning down the thermostat, stringing clothes lines instead of clothes dryers, and trading in older appliances for those with better energy ratings. This works exceptionally well on the individual scale, where residents have complete control over the physical plant of their home.
The irony of this simple and effective approach is that as we reduce our overall electric consumption measured as kilowatt hours (kWh), we lower our own bills, but inadvertently increase the Co-op’s cost per kWh. Since the only direct revenue source for WEC to provide service comes from sale of energy to members, efficiency measures—which work great for the individual—have a deleterious effect on WEC’s rates. That is because WEC’s expenses do not go down relative to the amount of energy use reduced through efficiency measures. Many operational costs remain the same regardless of the number of kWh sold to members.
If you enjoy math, here’s why: (Operational Expense $) / (kWh income $) = $ / kWh. If we decrease the denominator (kWh), we increase the result of the equation ($).
So, as individual members reduce their kWh use through efficiency, the system cost per kWh goes up. It may leave you feeling a bit cynical to learn that the efficiency you work so hard to achieve, when applied across the entire membership, can place upward pressure on rates.
And yet! There are many other ways in which a cooperative, working together, can mitigate some of the losses of revenue realized through efficiency. That brings us to electrical beneficiation: that is, replacing some or all of our fossil fuel-burning appliances and tools with electrically operated ones.
“Whoa, you just said reduce the number of kWh I use, and now you are asking me to increase use of kWh by converting my gas dryer to an electric one, or my diesel car to an electric one? This seems crazy and counterintuitive.” Yup, that’s what I am saying.
Here are two good reasons: 1. Your gas bill will go down, and 2. Our air will be cleaner since most of WEC’s energy comes from lower carbon sources.
The bottom line is there is no way to get around paying for the energy you choose to use on a monthly basis (setting solar aside for another discussion), but by transferring your gas dollars into WEC electric dollars, you will mitigate the impacts of efficiency.
The benefit of switching out gas to buying 100% renewable electricity from WEC is that instead of spending your dollars purchasing fossil fuels from for-profit sources, you will instead be directing those dollars towards your electric cooperative and keeping rates lower for every member in the cooperative.
So, what’s really in it for me if I transfer my gas dollars into electric dollars? Aside from the benefits to our air quality, the real reason is that as a member of a co-op, and helping to make that co-op financially strong, we can all benefit from an increase in the number of kWh sold.
The difference for you personally in what you will pay for electricity versus what you currently pay for fossil fuel is well above the scope of this piece and is truly a case by case calculation best left to the experts (call Efficiency Vermont). However, if you transfer your dollars to electricity and away from gas or oil you are investing in your cooperative keeping the overall cost per kWh hour lower.
WEC is a very small co-op. It’s not only the number of customers, but because our membership is primarily residential, our kWh sales are low relative to other co-ops our size. Despite size and sales numbers, our rates are only about 10% higher than other Vermont utilities. And as those utilities work to attain 100% renewability as WEC already has, their rates will likely climb at a steeper rate in the years ahead.
The investment you make in beneficial electrification increases your equity in the Co-op. One thing you will only see from your cooperative—and not investor-owned utilities—is a return on your investment in the form of what is called capital credits. Watch your bill year over year: in November you will usually receive a credit on your bill relative to your investment (the amount of kWh you used in the time period being credited). Use more and receive more. That is the cooperative principle of equity I fully appreciate as a member.
Some fun facts about cooperative electric utilities from National Rural Electric Cooperative Association (NRECA):
- Co-ops serve 42 million people, including 92% of persistent poverty counties.
- Co-ops power over 22 million businesses, homes, schools, and farms in 48 states.
- Co-ops return more than $1 billion to their consumer-members annually as not-for-profit organizations.
- 830 distribution cooperatives are the foundation of the electric cooperative network. They were built by and serve co-op members in the community by delivering electricity and other services.
- 64 generation and transmission cooperatives provide wholesale power to distribution co-ops through their own electric generation facilities or by purchasing power on behalf of the distribution members.
Visit NRECA at electric.coop to learn more about the electric co-op community across the country.
Susan Alexander is a WEC Director from Cabot.